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Revenue from contracts with customers
 3 Months Ended
Mar. 31, 2020
Revenue from contracts with customers
NOTE 3 – Revenue from contracts with customers:
Disaggregation of revenue
The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15.
                                         
  
Three months ended March 31, 2020
 
  
North
America
 
  
Europe
 
  
International
Markets
 
  
Other
 
activities
 
  
Total
 
  
(U.S. $ in millions)
 
Sale of goods
   
1,625
     
1,370
     
482
     
177
     
3,655
 
Licensing arrangements
   
25
     
12
     
3
     
1
     
41
 
Distribution
   
426
     
2
     
6
     
—
     
434
 
Other
    6      
19
     
74
     
129
     
227
 
                                         
   $
2,082
    $
1,402
    $
565
    $
307
   
$
4,357
 
                                         
  
 
Three months ended March 31, 2019
 
  
North
America
 
  
Europe
 
  
International
Markets
 
  
Other
 
activities
 
  
Total
 
  
(U.S. $ in millions)
 
Sale of g
oods
    
1,637
     
1,259
     
468
     
187
     
3,551
 
Licensing arrangements
   
31
     
5
    §
 
 
    
1
     
37
 
Distribution
   
379
    §
 
 
    
5
     
—  
      
383
 
Other
   
—
    §
 
 
    
48
     
128
     
176
 
                                         
   $
2,047
    $
1,264
    $
521
    $
317
    $
4,149
 
                                         
 
§
Represents an amount less than $1 million.
The financial data presented in the tables above with respect to prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c.
Variable consideration
Variable consideration mainly includes sales reserves and allowances (“SR&A”), comprised of rebates (including Medicaid and other governmental program discounts), chargebacks, returns and other promotional (including shelf stock adjustments) items. Provisions for prompt payment discounts are netted against accounts receivables.
The Company recognizes these provisions at the time of sale and adjusts them if the actual amounts differ from the estimated provisions.
SR&A to U.S. customers comprised approximately 82% of the Company’s total SR&A as of March 31, 2020,
with the remaining balance primarily in Canada and Germany. The changes in SR&A for third-party sales for the three months ended March 31, 2020 and 2019 were as follows:
                                                                 
 
Sales Reserves and Allowances
   
 
 
Reserves
included in
Accounts
Receivable, net
 
  
Rebates
 
  
Medicaid and
other
governmental
allowances
 
  
Chargebacks
 
  
Returns
 
  
Other
 
  
Total reserves
included in SR&A
 
  
Total
 
 
(U.S. $ in millions)
 
Balance at December 31, 2019
  $
87
     $
2,895
     $
1,109
     $
1,342
     $
637
     $
176
     $
6,159
     $
6,246
  
Provisions related to sales made in current year period
   
102
      
1,370
      
233
      
2,223
      
139
      
33
      
3,998
      
4,100
  
Provisions related to sales made in prior periods
   
—  
      
(106
 )    
(29
 )    
(16
 )    
(1
 )    
4
      
(148
 )    
(148
 )
Credits and payments
   
(106
 )    
(1,513
 )    
(248
 )    
(2,396
 )    
(112
 )    
(35
 )    
(4,304
 )    
(4,410
 )
Translation differences
   
—  
      
(21
 )    
(2
 )    
(6
 )    
(4
 )    
(10
 )    
(43
 )    
(43
 )
                                                                 
Balance at March 31, 2020
  $
83
      
2,625
     $
1,063
     $
1,147
     $
659
     $
168
     $
5,662
     $
5,745
  
                                                                 
                                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserves
included in
Accounts
Receivable, net
 
  
Rebates
 
  
Medicaid and
other
governmental
allowances
 
  
Chargebacks
 
  
Returns
 
  
Other
 
  
Total reserves
included in SR&A
 
  
Total
 
 
(U.S.$ in millions)
 
Balance at December 31, 2018
   $
175
    $
3,006
    $
1,361
    $
1,530
    $
638
    $
176
    $
6,711
    $
6,886
 
Provisions related to sales made in current year period
   
112
     
1,350
     
324
     
2,320
     
72
     
114
     
4,180
     
4,292
 
Provisions related to sales made in prior periods
   
—
     
—
      
1
      
(5
 )    
3
     
(1
 )    
(2
 )    
(2
 )
Credits and payments
   
(125
 )    
(1,613
 )    
(438
 )    
(2,413
 )    
(117
 )    
(101
 )    
(4,682
 )    
(4,807
 )
Translation differences
   
—
     
(6
 )    
(1
 )    
—
      
—
      
—
     
(7
 )    
(7
 )
                                                                 
Balance at March 31, 2019
  $
162
     
2,737
    $
1,247
    $
1,432
    $
596
    $
188
    $
6,200
    $
6,362
 
                                                                 
 
Allowance for credit losses
Accounts receivable are recognized net of allowance for credit losses. Allowances for credit losses were $127 million and $135 million as of March 31, 2020 and December 31, 2019, respectively. The decrease is mainly due to currency fluctuations.